The inability to control proliferation and differentiation of epidermal keratinocytes is a major obstacle in wound healing following trauma or surgery, and in the treatment of diseases involving abnormal epidermal differentiation, from carcinomas to psoriasis. The long-range goal of this research is to identify the mechanisms underlying the genetic regulatory pathways that specify the spectrum of proteins and the resulting cellular characteristics of particular stages of keratinocyte differentiation. To do this, we must identify the trans-acting factors and cis-acting elements that regulate differentiation-specific epidermal genes, such as transglutaminase type 1 (TGM1). The highly conserved homeobox (Hox) family of transcription factors can control cell identity and differentiation, and aberrant Hox regulation can lead to developmental abnormality or disease. Many Hox proteins recognize a common DNA sequence mainly via a small number of contacts in vitro, suggesting that additional mechanisms must underlie their diverse in vivo target specificity. Recent findings indicate that cooperative Hox interaction with cofactors can increase DNA specificity and affinity. We have identified the HOXA7 cDNA in a differentiating keratinocyte library through specific interaction with the KD-enhancer, that confers keratinocyte-specific activation to E6/E7 HPV-16 promoter. Sequence analysis indicates that KD-enhancer homology is present in the TGM1 5' promoter region (K3), which contains a Hox DNA recognition core element, as well as a binding site 90 percent identical to a known binding site for heterodimers of Hox and Pbx, the mammalian homolog of the Drosophila extradenticle. By transient transfection, HOXA7 suppresses transcriptional activity of K3 in neonatal keratinocytes, but strongly transactivates K3 in the epidermoid carcinoma cell line ME180. We propose that HOXA7 differentially regulates the keratinocyte differentiation marker gene TGM1 in neonatal keratinocytes and ME180, through interaction with co-factors, allowing cell-specific suppression or activation of the same gene. We will test this hypothesis by 1) determining the cis-acting elements in the TGM1 upstream regulatory region (K3) important in HOXA7 transactivation in neonatal keratinocytes and ME180 in vivo, and in HOXA7 binding in vitro, 2) identifying the functional domain of HOXA7 necessary for activation or repression of TGM1 in the two cell types in vivo, and for K3 binding in vitro, and 3) characterizing nuclear cofactors that form complexes with HOXA7 and K3 DNA. This study will begin to elucidate molecular mechanisms involved in HOX regulation of keratinocyte proliferation and differentiation, that in the long term may lead to new methods for controlling keratinocyte growth in re-epithelialization of wounds, and in treatment of cancers and other hyper-proliferative and disease.